JUDGMENT : Nitin Jamdar, J. Mercator Oil & Gas Limited, having failed to get an order of injunction from the learned Single Judge to restrain the Respondent no.1 Oil & Natural Gas Corporation from encashing the bank guarantees, has approached us with this appeal. 2. Mercator Oil & Gas Limited had filed two Arbitration Petitions under section 9 of the Arbitration and Conciliation, 1996. Arbitration Petition (L) No.1085/2018 was filed to restrain Oil & Natural Gas Corporation Limited from terminating the contract between the parties and to restrain it from invoking the bank guarantees. Arbitration Petition (L) No.1162/2018 was filed seeking to restrain ONGC from giving effect to the termination of the contract. The learned Single Judge rejected both these petitions on 3 June 2019. This appeal is filed under section 37 of the Act of 1996 challenging the order passed in Arbitration Petition (L) No.1085/2018 regarding the invocation of bank guarantees. 3. Mr. Janak Dwarkadas, Senior Advocate, argued for the Appellant; Mr. D.J. Khambata, Senior Advocate for the Respondent No.1-ONGC and Mr.K.A.Suryanarayanan for Respondent No.2- Bank. The issue to be decided is in a narrow compass. Whether the ingredients required to restrain invocation and payments under bank guarantees are present. These ingredients are by now well defined. They are the existence of fraud and special equities that may arise. To discover if these grounds exist, a narration of facts leading to this appeal is necessary. 4. Oil & Natural Gas Corporation Limited, ONGC for short, has various ocean-going vessels used for petroleum operations. Sagar Samrat, a jack-up self-elevating drillship, is one of them. Sagar Samrat struck oil in February 1974. It is one of the first offshore drilling rigs in India. ONGC wanted to carry out extensive work to Sagar Samrat. ONGC called this work as -Sagar Samrat Conversion Project. The Project was to be entrusted on turn-key basis. ONGC invited a tender on 26 April 2011 for the work. 5. Mercator Oil & Gas Limited is a Mumbai based company. Mercator Offshore (P) Ltd, its sister company is incorporated under the laws of Singapore. Gulf Piping Co. W.L.L is incorporated under the laws of the United Arab Emirates. Mercator Oil & Gas Limited, Mercator Offshore (P) Ltd and Gulf Piping Co. W.L.L, formed a consortium for undertaking the Sagar Samrat Project work. 6. The Consortium Agreement was signed on 15 December 2011. Gulf Piping Co. W.L.L is incorporated under the laws of the United Arab Emirates. Mercator Oil & Gas Limited, Mercator Offshore (P) Ltd and Gulf Piping Co. W.L.L, formed a consortium for undertaking the Sagar Samrat Project work. 6. The Consortium Agreement was signed on 15 December 2011. The object of the agreement was stated as for execution and undertaking the project work and of regulating their inter se relationship. Signing a pre-bid agreement on 26 July 2011 with ONGC and that a notice of award for the Project on 17 November 2011 was received was noted. Clause 2.2 of the Consortium Agreement provided that the Consortium shall be construed and deemed to be for the single purpose of carrying out the contract and shall not be deemed to be a separate entity for any other purpose. It was not to be construed to create a permanent partnership or co-operation among the parties or to authorize the parties to act as a general agent for other parties. Mercator Oil & Gas Limited, Mercator for short (the Appellant) was to be the lead member of the Consortium. The parties agreed that they, as a consortium, would co-operate with each other for the execution of the project. They also agreed that they would not make a commitment or agreement with ONGC, which affect the Respondents' liabilities and rights of other parties without prior discussion and agreement with other parties. They agreed to cooperate with each other during the project. The agreement listed out various standard conditions. 7. ONGC entered into an agreement with the Consortium on 15 December 2011. Clause 2.1.1 defined the scope of work. The scope of work was substantial. It included to surveys, preengineering, pre-construction and pre jack-up, post jack-up, design, engineering, procurement, fabrication, transportation, hook-up, testing, certification/inspection, pre-commissioning, start-up and commissioning of entire facilities including demolition as described in the bidding documents. It also included all engineering and design requirements to design and engineer facilities including all safety studies; provide purchasing, expediting, inspection, handling and transportation of all materials and equipment; preparing and issuing purchase specifications after obtaining approval form ONGC; supervision & monitoring and progress; preparing and issuing all drawings required; provide all manpower, materials, docking & undocking; and all services necessary to perform the work for the complete installation as described in bidding document. The general obligations of the Contractor were stipulated under clause 2.3. The general obligations of the Contractor were stipulated under clause 2.3. It also provided for handing over of Sagar Samrat after the conversion programme of the work was submitted. 8. The agreement referred to documents annexed, which were to be construed as an integral part of the contract. The documents annexed with the agreement inter alia were general conditions of the contract, scope of work and Consortium Agreement amongst others. The general conditions of the contract contain various standard clauses, and clause 3.3.3 referred to a bank guarantee. This clause provided that ONGC shall have the right under this guarantee to invoke the bank guarantee and claim the amount if the Contractor failed to honour the commitments entered into under this contract and forfeit the same. If the Contractor failed to furnish the bank guarantee as stipulated, ONGC could terminate the contract and forfeit the bid security amount, and no compensation for the works performed was payable upon such termination. Upon completion of works, the guarantee was to be considered to constitute the Contractor 's warranty for the work done by him or for the works supplied and their performance as per the specifications and any other conditions against this contract. The value of performance bank guarantee for the warranty period was to be reduced from 10% to 5% of the contract value. Clause 6.3 stipulated completion, failure and termination. The date of completion was as per clause 6.3.1. The scheduled completion date for the work described in the bid document was to be 31 May 2013 for handing over of Sagar Samrat to the Contractor. 9. The Project was not completed as scheduled. There was an increase in the scope of work. On 9 March 2013, ONGC granted an extension of time for completion of work till 20 December 2015. ONGC did not stipulate liquidated damages since the delay was because of the increase in the scope of the work. On 12 November 2014, a management review meeting was held between Mercator, GPC and ONGC. Consortium assured that project would be completed expeditiously, and Sagar Samrat would be ready to sail on 30 September 2015. Ten days before the sail away date, on 20 September 2015, Mercator submitted a revised schedule for Sagar Samrat to sail by 20 November 2015. On 12 November 2014, a management review meeting was held between Mercator, GPC and ONGC. Consortium assured that project would be completed expeditiously, and Sagar Samrat would be ready to sail on 30 September 2015. Ten days before the sail away date, on 20 September 2015, Mercator submitted a revised schedule for Sagar Samrat to sail by 20 November 2015. Again on 30 November 2015, Consortium requested for an extension of time till 20 April 2016, which was granted by ONGC till 20 April 2016. The sail-away date was rescheduled to 7 March 2016. In February 2016, Mercator proposed new schedule and sail-away date between 15 to 20 April 2016. Again, on 12 April 2016, Consortium sought for extension of the deadline and by way of Amendment No.9 to the contract, on 18 April 2016, ONGC granted extension till 15 December 2016. 10. Management Review Committee meetings were held. ONGC noticed that disputes had arisen between the Mercator and GPC over the cash flow issues One of the main subcontractors Seven Seas, engaged by GPC doing architectural works, had stopped the work due to nonpayment of its dues. ONGC expressed grave concern regarding the lack of progress. ONGC highlighted the insignificant progress in the preceding months. Mercator informed that it was running short of funds and one of their sister companies in Singapore was in bankruptcy which had affected the credit lines of Mercator Group. Mercator also stated that advance would be required for the Consortium to proceed further and requested financial support from ONGC. 11. On 25 November 2016, Consortium asked for an extension again. On 14 December 2016, ONGC granted extension till 24 May 2017 subject to the right to levy liquidated damages. 12. On 19 January 2017, a supplementary agreement was entered into between ONGC and the Consortium. It was agreed that an advance of Rs.32 crore would be provided by ONGC to Consortium to facilitate smooth progress in completion of the project. There was provision for advance guarantees. Clauses- 7 and 10 of the supplementary agreement provided that the Contractor would repay to ONGC, the entire Advance with interest accrued thereon, in a single installment not later than 24 May 2017. In case of breach of the Supplemental Agreement by the Contractor, ONGC was entitled to encash the Bank Guarantees furnished by the Contractor. Clauses- 7 and 10 of the supplementary agreement provided that the Contractor would repay to ONGC, the entire Advance with interest accrued thereon, in a single installment not later than 24 May 2017. In case of breach of the Supplemental Agreement by the Contractor, ONGC was entitled to encash the Bank Guarantees furnished by the Contractor. If any amount remained unpaid or unrecovered after encashment of the bank guarantees, ONGC had the right to recover such outstanding. The Contractor also agreed that the entire advance amount and the interest accrued thereon would become forthwith payable by the Contractor to ONGC if the Contractor committed any breach or default in performance or observance of the covenants contained in the contract. Pursuant to the agreement, Mercator submitted two advance guarantees towards the advance of Rs.32 crore. On 4 April 2017, ONGC released payment of US$ 4.11 million towards change order of leg attachments communication change order. 13. On 16 May 2017, Consortium sought an extension. ONGC granted extension till 15 October 2017. On 4 October 2017, the Consortium again sought extension which was granted till 15 March 2018. In the management review committee held on 16 November 2017, the differences between GPC and Mercator were reflected during the discussion when GPC raised the issue of pending payment from Mercator. On 6 March 2018, Consortium sought further extension. On 13 March 2018, by way of the sixth extension, ONGC granted time for completion of work till 30 November 2018. In the meeting held on 16 April 2018, a sail-away date was fixed as 15 September 2018. In the meeting held on 11 June 2018, the financial difficulties faced by the Consortium were discussed. GPC asked ONGC to pay to them directly; however, ONGC advised the Consortium to settle the disputes amongst themselves and that there should be no hindrance with the sailaway date. In the meeting held on 23 July 2018, ONGC expressed concern on the progress of the work and observed that except for some work other works were standing still. The Consortium expressed financial difficulties. ONGC reiterated that Mercator should infuse funds to achieve sail-away by 15 September 2018. 14. On 28 August 2018, GPC moved the Court of Abu Dhabi regarding suspending disbursement of two bank guarantees issued in favour of Mercator. The Court in Abu Dhabi suspended disbursement of two bank guarantees on 28 August 2018. The Consortium expressed financial difficulties. ONGC reiterated that Mercator should infuse funds to achieve sail-away by 15 September 2018. 14. On 28 August 2018, GPC moved the Court of Abu Dhabi regarding suspending disbursement of two bank guarantees issued in favour of Mercator. The Court in Abu Dhabi suspended disbursement of two bank guarantees on 28 August 2018. On 10 September 2018, ONGC submitted an update to the Government of India regarding the project. ONGC anticipated project completion by March 2019. 15 September 2018 came and went without sail-away date being fulfilled. On 25 September 2018, ONGC issued Cure notice with a title "Notice for Termination" giving 14 days to Mercator to initiate remedial action acceptable to ONGC. On 27 September 2018, GPC wrote to Mercator they were reviewing their options, and they were unable to provide it with their position. GPC requested Mercator to keep them informed about the outcome of the hearing in the High Court. On 25 September 2018, ONGC invoked bank guarantees given by Mercator. On 26 September 2018, Mercator filed Arbitration Petition (L) No.1085/2018 and, by an ad-interim order, stay was granted on payment by the bank regarding the invocation of bank guarantees given by Mercator. On 3 October 2018, Mercator submitted a remedial action plan pursuant to the cure notice. ONGC rejected this plan on 10 October 2018. On that day, ONGC terminated the contract because the Contractor has failed to adhere to sail-away, and the progress of the work was not satisfactory. On 23 October 2018, Mercator wrote to the Respondent bank setting out the reasons it felt there was a fraud in the invocation of bank guarantees and not to take further steps. ONGC thereafter awarded the balance work to GPC on a standalone basis on 25 October 2018. Mercator filed another petition being Arbitration Petition (L) No.1162/2018 on 16 October 2018. 15. The learned Single Judge heard the arbitration petitions together. The learned Single Judge opined that the bank guarantees were unconditional constituting an independent contract between the bank and the party in whose favour the bank guarantees were issued. The learned Single Judge after considering factual position concluded there was no case of fraud as required in law was made out, and ONGC had acted to salvage the situation. The learned Single Judge dismissed the arbitration petitions by an order dated 3 June 2019. The learned Single Judge after considering factual position concluded there was no case of fraud as required in law was made out, and ONGC had acted to salvage the situation. The learned Single Judge dismissed the arbitration petitions by an order dated 3 June 2019. As stated earlier, the order challenged in the appeal is regarding the bank guarantees. 16. The foundation of Mercator's case is the existence of fraud. The proposition advanced is that the demand by the beneficiary under the bank guarantee may become fraudulent not because of fraud while executing the underlined contract but because of subsequent events and circumstances. The primary grievance of Mercator before us is that invocation of performance of bank guarantee and advance bank guarantee by ONGC was pursuant to the scheme between ONGC and GPC to remove Mercator Group from the Consortium and award contract to GPC on a stand-alone basis. Mercator contends that ONGC, a public body, has acted fraudulently to break up the Consortium and must be restrained from encashing the bank guarantees. Mercator alleges that the Respondent-bank knew of the fraud before trying to make the payment. 17. According to Mercator, following facts cumulatively taken will justify its allegation of fraud: (i)When the completion date was 30 November 2018, GPC surreptitiously obtained an ex parte order from the Abu Dhabi Court suspending the performance bond of US$ 9.2 million; (ii) ONGC had informed the Government of India that completion of the project would be in March 2019, yet within days issued a notice to the Consortium on 25 September 2018 giving 14 days cure period. On the same date, the Consortium received a cure notice, which was only a formality, ONGC attempted to encash Mercator's performance guarantee and advance guarantee; (iii) On 27 September 2018, when Mercator was seeking to move the Court, the GPC's response was noncommittal. When the Consortium was facing the prospect of cancellation of entire work, such a noncommittal response by one of its partner was out of place. It would only show that GPC knew ONGC would give remaining work to it and, thus, the move by ONGC was pre-planned; and (iv) Mercator submitted a remedial plan on 3 October 2018, ONGC did not even bother to look into the remedial plan and rejected it on 10 October 2018, and on the same date, ONGC terminated the contract. It would only show that GPC knew ONGC would give remaining work to it and, thus, the move by ONGC was pre-planned; and (iv) Mercator submitted a remedial plan on 3 October 2018, ONGC did not even bother to look into the remedial plan and rejected it on 10 October 2018, and on the same date, ONGC terminated the contract. Within a week thereafter, on 18 October 2018, GPC terminated the agreement and on 20 October 2018, the balance work was awarded to GPC. 18. According to Mercator, it is pertinent to note there is no denial of negotiations in the affidavit-in-reply filed by ONGC and what is denied is only there were no secret negotiations. There are no details as to when a commercial decision was taken to entrust the balance work to GPC. Mercator contends that the learned single Judge attributed commercial prudence to ONGC a commercial prudent when there were no such factual particulars on record. Mercator contends that the learned Single Judge has committed various errors such as in not appreciating that the cure notice did not require Consortium to complete balance work within fourteen days. Since Mercator had submitted a remedial plan in response to the demand of ONGC, the bank guarantees could not have been invoked. If ONGC was not happy with the performance of the Consortium, this dissatisfaction was towards the Consortium collectively, and it is not explained how GPC was then selected to complete the balance work. ONGC issued no notice that Mercator has breached the supplementary agreement. The Consortium had time till 30 November 2018 to complete the work under the project. The advance guarantees were given as security for repayment of the interest-bearing advance and not for the performance of the obligation under the contract. The bank was informed of the fraudulent conduct of ONGC on 23 October 2018 and knew of the same. Issuing of cure notice to Mercator was only a farce as ONGC had decided to give remaining work to GPC. ONGC had attempted to break the Consortium and had given the balance work to GPC. ONGC cannot say it had no concern with the Consortium as the agreement between the parties under it as the main contract made the Consortium Agreement an integral part of it. ONGC had attempted to break the Consortium and had given the balance work to GPC. ONGC cannot say it had no concern with the Consortium as the agreement between the parties under it as the main contract made the Consortium Agreement an integral part of it. Mercator had made clear averments regarding collusive conduct and for injunction what is necessary is the establishment of prima facie case and balance of convenience. A prima facie case of fraud is established, and the balance of convenience is in favour of Mercator since they would suffer irreparable injury if bank guarantees are allowed to be encashed. 19. ONGC countered these submission contending there were extensions after extensions given by ONGC to the Consortium. The sail-away date was crucial as the Sagar Samrat had to travel to its destination from its location. Completing the project was essential to ONGC as the Country could then produce 14500 BOPD of oil production and gas production @ 1.76 MMSCMD. Without completion of the project, this fuel had to be imported by the country and, thus, it would be of prime national importance that the project had to be completed in all respect as soon as possible. The original date of performance of the contract was extended six times, and ONGC was naturally anxious about the slow progress of work and delay. There was no such scheme to oust Mercator and to give the balance work to GPC on a stand- alone basis. There were differences within the Consortium which were recorded time and again in the review meetings. GPC had complained that Mercator was not releasing its dues and ONGC repeatedly requested the Consortium parties to resolve the issues so that the work is not affected. After giving various extensions and when even the revised sail-away date of 15 September 2018 could be not reached, ONGC had no option but to issue cure notice as per clause 6.3.2(ii) of the agreement. The remedial action plan submitted by Mercator was not sufficient, and the reply was not arbitrary, but the details were given. The termination of the contract was after the cure period had expired on 10 September 2018. The update to the Government of India was a summary update, and that cannot be a foundation of fraud. The remedial action plan submitted by Mercator was not sufficient, and the reply was not arbitrary, but the details were given. The termination of the contract was after the cure period had expired on 10 September 2018. The update to the Government of India was a summary update, and that cannot be a foundation of fraud. ONGC had already released Rs.32 crore + 7 million US$ and 1.7 million US$178 million, and still, the work was not progressing satisfactorily. Sagar Samrat was in possession of GPC, and it made a commercial sense that to get the remaining work done from GPC. Faced with the situation of gross delay and loss, ONGC had to take a decision keeping in mind the commercial and other aspects. Mercator was in severe financial trouble and had asked ONGC for further advance. Clause 3.3.3 of the contract gives a right to ONGC to invoke performance bank guarantee if the Contractor failed to honour any of the commitments entered. The sail-away date of 15 September 2018 crucial for further development was admittedly not met, and this breach is good enough for invocation of bank guarantee. Even clause 10(c) of the supplementary agreement gave a right to ONGC to invoke advance bank guarantees if Mercator committed any breach in default in performance and observation of any of the commitments. There is no answer to this breach of not following the sail-away date and, therefore, an unequivocal right is accrued to ONGC to invoke bank guarantees. Mercator is not insisting on seeking specific performance of the contract, and it is only a desperate attempt to injunct ONGC from invoking bank guarantees. ONGC had received numerous complaints from various subcontractors that Mercator had failed to clear their dues. Mercator had not paid its subcontractors, and even GPC was complaining about the same. The Annexure-D to the contract provided for construction schedule and project key dates date, and one of the crucial dates was the startup date, i.e. sailaway date. Unless the vessel sailed away, further schedule obviously could not be made. There is no false statement made to the bank as there was a breach. 20. There are two distinct aspects in this dispute. First, a claim in damages arising from the contractual dispute. Second, a prayer for restraint on the invocation of bank guarantee. For these two, the legal tests and reliefs are distinct. There is no false statement made to the bank as there was a breach. 20. There are two distinct aspects in this dispute. First, a claim in damages arising from the contractual dispute. Second, a prayer for restraint on the invocation of bank guarantee. For these two, the legal tests and reliefs are distinct. We are not concerned with the first aspect. That will be decided in the arbitration proceedings. Mercator’s arguments in many areas mixes these two facets, and we have to be mindful in delineating the two. 21. As we have mentioned at the beginning of this judgment, the issue is whether the ingredients required to restrain invocation and payments under bank guarantees are present. They are the existence of fraud and special equities that may arise. We will take up Mercator’s allegation of fraud first. 22. Foremost, a case of fraud cannot be orally made. It must find a foundation in the pleadings. The evidence must be clear and mere assertion without strong corroborative evidence is not enough. This is more so in the cases of bank guarantees as a grant of injunction restraining invocation of bank guarantee is in an exceptional case. The exception cannot be taken lightly. 23. According to Mercator, no such stringent proof is required to establish fraud, and a prima facie case is enough. In support of its contention, Mercator has relied upon the decision of the Privy Council in the case of Satish Chandra Chatterji & Ors. v. Kumar Satish Kantha Roy and Ors., Vol.XXVII The Calcutta Weekly 327 Reliance was placed on the observation that the charges of fraud and collusion must, no doubt, be proved by those who make it but it is not necessary that every puzzling artifice or contrivance resorted to by the accused of fraud must necessarily be wholly untraveled and cleared up before a verdict can be appropriately found against him, otherwise, many clever and dexterous knave would escape. However, this decision will have to be read in its totality to find out whether the Privy Council merely proceeded on conjectures. Here, the person alleged of fraud was a Manager and co-owner of a plot of land. Using his position as Manager, he deliberately caused a default in payment. He, therefore, jeopardized the co-owner. The property was put to auction. The mortgage was annulled, and the sale was challenged. Here, the person alleged of fraud was a Manager and co-owner of a plot of land. Using his position as Manager, he deliberately caused a default in payment. He, therefore, jeopardized the co-owner. The property was put to auction. The mortgage was annulled, and the sale was challenged. Before the Privy Council, substantial evidence was led. The Privy Council, after a detailed assessment of evidence, concluded that it was a case of established fraud. In this case, the Privy Council did not conclude the case after making a general proposition and proceeded on conjectures. Before the Privy Council, the fraud was established by leading evidence. Therefore the fraud as envisaged regarding bank guarantee cannot be of mere conjecture. The Courts have used different phrases ‘good prima facie case', ‘strong prima facie case' and ‘fraud of egregious nature' to establish a fraud as the foundation of seeking an injunction regarding bank guarantees. If the pleadings contain mere allegations and denials, the matter cannot be taken forward to establish fraud. There must be evidence to link the allegations. 24. Turning now to pleadings of Mercator on this aspect. They are found in the Arbitration Petition filed before the single learned Judge and in the Rejoinder. In the Arbitration Petition, in paragraphs-16 and 18C, Mercator states that the Contractor had time till 9 October 2018 to cure the breach. The contract was valid until 30 November 2018. The Contractor was prevented from recommencing the work because of ONGC's failure and refusal to pay the dues. It is asserted that ONGC, on the one hand, prevented the performance of the contract and on the other hand, issued a notice of termination giving 14 days cure period. On the one hand, it permitted the Contractor to remedy the breach, and on the other hand, invoked the bank guarantee. In paragraph-18C, it is stated that the bank guarantees given, at the most, be invoked for the US$ 3.289 million considering the claim of liquidated damages, yet the bank guarantees of US$ 15.214 million have been invoked and, therefore, it is a case of fraud. 25. Thus, in the petition, fraud alleged is on two counts. In the pleadings, there is no case that a scheme was planned by ONGC to oust Mercator from the Consortium right from the beginning to give the balance work to GPC. 25. Thus, in the petition, fraud alleged is on two counts. In the pleadings, there is no case that a scheme was planned by ONGC to oust Mercator from the Consortium right from the beginning to give the balance work to GPC. After reply affidavit was filed by ONGC, in the rejoinder it is stated that anticipating ONGC's motivated and dishonest attempts to oust Mercator possibly by promising GPC that balance work would be awarded to it, Mercator wrote on 11 October 2018 not to allot the work to any person other than the Consortium. Even then, it is indicated as a possibility. In paragraphs- 12, 13 and 14, it is stated that the remedial plan was not responded to and the bank guarantees were invoked on the very same day when 14 days' cure notice was given. However, this allegation has changed hues from time to time. The argument of fraud has developed as the matter progressed, piecing together different events and facts to create a picture of fraud. 26. The learned Counsel have cited various decisions governing invocation of bank guarantee. We do not deem it necessary to reproduce them in this decision as on basic principles there is no dispute at the bar. The dispute is about applying the law to the facts, and the finer nuances. Thus we have referred to only those decision closest to the facts of the present case. Before we proceed further to comment on the rival contention, we will briefly recapitulate the legal position. 27. The basic principles are these: The contours of the powers of the Court to grant an injunction against the invocation of bank guarantee are narrow. The bank issuing the guarantees takes the obligation to repay the amount on demand and without questioning the legal relationship between the parties in whose favour the guarantee is given and who has given the bank guarantee. The bank is not concerned with the relationship between the supplier and buyer nor where the supplier has performed his contractual obligation. The bank must pay according to guarantee. This is because the bank raises its credit involving its reputation. The purchaser is a sole judge to decide as to when the bank guarantee has become recoverable, or the seller or other parties has committed a breach. The bank must pay according to guarantee. This is because the bank raises its credit involving its reputation. The purchaser is a sole judge to decide as to when the bank guarantee has become recoverable, or the seller or other parties has committed a breach. Only in rare circumstances that the Court will issue an order of injunction restraining the bank in performance of bank guarantee. Of the two known exceptions to otherwise embargo are: Fraud and Special equity. If however there is fraud committed by the parties and that the bank has notice of the fraud, then the Court may issue an order of injunction. The fraud in such cases is not the one spoken in general terms. It us such fraud where the person in whose favour the bank has issued the bank guarantee fraudulently represents the bank expressly or by implication of a fact untrue to his knowledge. The nature of the fraud should be egregious as to vitiate the entire transaction. The word egregious generally means extraordinary, very noticeable, conspicuous, glaring, flagrant bad conduct. The fraud should be such that vitiates the underlying foundation of the main contract. Thus, the grant of an injunction against the invocation of bank guarantee would depend upon as to whether any case of fraud destroying the very foundation of the contract is made out. The case at hand, thus, must be decided based on its facts keeping the basic principles enunciated. 28. Mercator's case of fraud is based on the events that took place from August 2018 to October 2018. According to Mercator, the relevant events are: 28 August 2018 when GPC obtained an order from Abu Dhabi Court; 10 September 2018 when ONGC gave update to the Government of India in respect of project completion by March 2019; 25 September 2018 when cure notice was issued, and bank guarantees were sought to be invoked; 3 October 2018 when Mercator submitted a remedial plan; 10 October 2018 when remedial plan was rejected, and ONGC terminated contract; 18 October 2018 when GPC terminated the Consortium Agreement; and 25 October 2018 when balance work was awarded to GPC. 29. Mercator seeks to create a pattern from these events and to draw an inference of collusion and fraud. However, the events between August to October 2018 have to be understood in the backdrop of the events that happened earlier. 29. Mercator seeks to create a pattern from these events and to draw an inference of collusion and fraud. However, the events between August to October 2018 have to be understood in the backdrop of the events that happened earlier. A picture is sought to be created by Mercator as if the Consortium was working fine, and there were no inter se disputes and that GPC and ONGC had entered into a covert arrangement to break the Consortium and throw out Mercator out of Consortium so that the only beneficiary would be GPC. However, the totality of the circumstances right from entering into a contract with the Consortium until the award of balance work to GPC if considered, a different picture emerges. 30. In March 2013, ONGC granted an extension of time for the first time for completion of work till December 2015. This was due to the increase in the scope of work. On 12 November 2014, the Consortium informed that Sagar Samrat would be ready to sail on 30 September 2015. This did not happen. The second extension was granted on 14 December 2015. The sail-away date was rescheduled to 7 March 2016. In February 2016, Mercator proposed new schedule and sail-away date between 15 to 20 April 2016. This too was breached. ONGC granted the Second extension till 15 December 2016 reserving the right to levy liquidated damages. The sail-away date was extended to 7 March 2016 and completion and handover date on 20 April 2016. Serious differences arose between the Consortium partners on cash flow. One of the main subcontractors had stopped the work. Mercator had informed that it is running short of funds. On 14 December 2016, ONGC granted the third extension till 24 May 2017 subject to the right to levy liquidated damages. On 19 January 2017, a Supplementary Agreement was entered into. If the breach of this Supplemental Agreement occurred, ONGC was entitled to encash the Bank Guarantee(s) furnished by the Contractor against the Advance. On 23 May 2017, ONGC granted the fourth extension till 15 October 2017 reserving the right to levy liquidated damages. On 13 March 2018, by way of the sixth extension, ONGC granted time for completion of work till 30 November 2018. Except for the first extension, ONGC had reserved its right of liquidated damages in all subsequent extensions. The sail-away date was fixed as 15 September 2018. On 13 March 2018, by way of the sixth extension, ONGC granted time for completion of work till 30 November 2018. Except for the first extension, ONGC had reserved its right of liquidated damages in all subsequent extensions. The sail-away date was fixed as 15 September 2018. This date was not adhered to. Ultimately ONGC terminated the contract and awarded the balance work to GPC on a stand-alone basis. This is how the events unfolded. 31. Mercator's contention that GPC surreptitiously obtained an ex parte order from the Abu Dhabi Court suspending the performance bond is of no substance. There were disputes between GPC and Mercator, and GPC had moved to secure its interest. Summons was served on Mercator and ONGC came to know about the same during the court proceedings in India. If there were disputes within the Consortium and GPC moved to secure its interest, ONGC cannot be held to be instrumental in a conspiracy. Much capital is sought to be made of the representation made ONGC to the Government. However, ONGC had given its conservative estimate, keeping in mind the delays that generally take place. It was contended that on 27 September 2018, when Mercator was seeking to move the Court, the response of was noncommittal, and this would only show that GPC fully knew ONGC would give remaining work to it and, thus, the move by ONGC was pre-planned. From this few line response, Mercator seeks to rest its foundation of the allegation. GPC had said that they would be interested in the outcome of court proceedings. There could be various reasons for such response and fraud cannot be concluded from it. Far from driving a wedge between GPC and Mercator, ONGC had advised the consortium members to settle the disputes. In the meeting held on 11 June 2018, when GPC asked ONGC to pay to them directly, ONGC advised the Consortium to settle the disputes amongst themselves. ONGC had told Mercator should infuse funds to achieve sail-away by 15 September 2018. 32. Mercator contends that it submitted a remedial plan on 3 October 2018, ONGC did not even bother to look into the remedial plan and rejected it on 10 October 2018, and on the same day, ONGC terminated the contract. Within a week thereafter, on 18 October 2018, GPC terminated the agreement and on 20 October 2018, the balance work was awarded to GPC. Within a week thereafter, on 18 October 2018, GPC terminated the agreement and on 20 October 2018, the balance work was awarded to GPC. According to Mercator, this was all planned. ONGC has explained the position. After giving various extensions and when the revised sailaway date of 15 September 2018 was breached, ONGC had no option but to issue cure notice as per clause 6.3.ii of the agreement. A remedial action plan submitted by Mercator was not sufficient, and with details, the response was given. ONGC had lost confidence in Mercator, by then. The argument of Mercator that there was no denial of negotiations in the affidavit in reply has no merits. Mercator had alleged secret negotiations, which ONGC denied. If GPC was also doing work for ONGC and Sagar Samrat was in its possession, there were bound to be discussions. 33. As stated earlier arguments arising from contractual disputes were also sought to be blended in by Mercator. The argument that most of the work was completed when the termination was sought is a contractual dispute. The argument that sail-away date was not postulated and there was no breach is again a contractual dispute. Giving a cure notice calling upon to complete the shortfall was regarding completion of the contract. According to ONGC, there were several breaches of the contract, the important one being breaching the sail-away date of 15 September 2018. The concept of the sail-away date finds a place in the agreement. Without the Sagar Samrat sailing away, no further progress would take place. 34. The argument on behalf of Mercator was that sail-away date was not fixed is also not correct. In the meeting held on 16 April 2018, the Consortium had agreed that the Sagar Samrat would be ready to sail by 15 September 2018. There was the only word of caution that since approval from NWS would be required and weather conditions to be considered, the actual sail-away date might change. However, this did not take away the responsibility of the Consortium to make the Sagar Samrat ready for sail-away by 15 September 2018. Making the Sagar Samrat ready by a particular date is different than it actually sailing away. Sagar Samrat was not in a position to sail by 15 September 2018. This is being a breach of the condition of the contract; ONGC could invoke the bank guarantees. 35. Making the Sagar Samrat ready by a particular date is different than it actually sailing away. Sagar Samrat was not in a position to sail by 15 September 2018. This is being a breach of the condition of the contract; ONGC could invoke the bank guarantees. 35. One of the facets of law on fraud in such cases is that the beneficiary represents to the bank as a state of affairs which it knows it is false. ONGC had not represented to the bank any fact untrue to its knowledge. As per law, ONGC was the judge as to when the bank guarantee has become recoverable, and that a breach was committed. The terms of the contract, as extended, were not adhered to. Sail Away date was breached. There was no false representation. 36. The bank guarantees were admittedly unconditional. Once invoked the Respondent no.2 Bank in law was bound to pay to ONGC. Mercator argues that if there is fraud, then the fact that bank guarantees were unconditional is irrelevant. As a legal submission it is correct, however, the burden of showing there was fraud is heavy, and Mercator has not discharged this burden. 37. If the circumstances are seen in totality, no such scheme and collusion and fraud emerge. What emerges is that as the events unfolded, the parties acted in their commercial interest. In retrospect, Mercator seeks to attach meanings to the events to somehow create a case to restrain payments under bank guarantees. There was nothing sinister in ONGC giving the remaining work to GPC. Work of importance was admittedly delayed. The Consortium had failed to adhere to time-line despite numerous extensions. There were inter se disputes between the Consortium partners. Mercator was in financial difficulties. Only around 5% of the work was remaining. The project had taken nine years and yet was not completed. Sagar Samrat was lying with GPC. ONGC apprehended that Sagar Samrat being in possession of GPC, if taken out would create complications and litigations. ONGC though this would lead to further delays. ONGC had already released Rs.32 crore + 7 million US$ and 1.7 million 178 million US$, and still, the work was not progressing satisfactorily. ONGC was left with no alternative. The vessel was in possession of GPC, and it made a commercial sense to get the remaining work done from GPC. ONGC though this would lead to further delays. ONGC had already released Rs.32 crore + 7 million US$ and 1.7 million 178 million US$, and still, the work was not progressing satisfactorily. ONGC was left with no alternative. The vessel was in possession of GPC, and it made a commercial sense to get the remaining work done from GPC. On this backdrop, ONGC gave balance 5% work to GPC. Looking at the events in totality, we do not find there is any case of fraud as required by law is made out. 38. Turning to the decisions relied upon by Mercator wherein injunctions were granted. These cases have a different set of facts. In the case of Panama and South Pacific Telegraph Company v. India Rubber, Gutta Percha, and Telegraph Works Company, (1874-75) L.R. 10 Ch.App. 515 there was an agreement for laying down submarine telegraphic cables. The payment was to be made upon certificate being issued by the Engineer named in the agreement. The Engineer colluded to cheat his master. Surreptitiously, a subcontract was entered into. The Divisional Court of Appeal held that such conduct was opposed to common honesty. In the present case, there is no such principal-agent relationship. The main agreement indeed makes consortium agreement a part of the agreement, but that does not mean it casts a moral obligation on ONGC in all circumstances. Even if it did, in the present case, it can only be an action in damages and not a case of fraud. Further, in the case of Panama and South Pacific Telegraph Company, the Court found corroborative documentary evidence, which is not present in the case at hand. The second decision relied on is of the Delhi High Court in the case of Su-Kam Power Systems Ltd. v. Yog Systems India Ltd., IAs. 7384/06 and 7958/06 in CS(OS) No. 1368/06 decided On: 29.08.2006 This again had a different set of facts. Here the seller had represented to the buyer he is manufacturing transformers and would supply the same. The seller knew that the transporter had not delivered the transformers and had kept it in its godown. Despite this position, the seller represented to the bank that it had supplied the transformers for release of payment to it and the bank was aware of it. The seller knew that the transporter had not delivered the transformers and had kept it in its godown. Despite this position, the seller represented to the bank that it had supplied the transformers for release of payment to it and the bank was aware of it. It was a case of fraud on the face of it, and in such circumstances, the Court had granted an order of injunction. No such facts exist in the present case. 39. The second parameter of the grant of an injunction, of Special Equity, was faintly urged during arguments and finds mention in the written submission. It was stated there would be irreparable loss and injury caused to Mercator as Mercator has borrowed amounts from its lenders. This cannot be a case of Special Equity. It is not contended that it would be impossible for Mercator to recover its money from ONGC if it ultimately succeeds in arbitration. It is not argued out that ONGC is not in a financial position to pay the money if the Arbitrator awards the same to Mercator. There is no case of Special Equity. 40. The learned single Judge has exercised his discretion to refuse an injunction. We are considering an appeal challenging a discretionary order passed. According to the learned single Judge, the bank guarantees are unconditional. The extensions were granted by ONGC, which showed there was a serious problem in the execution of the contract. Disputes had arisen between the Consortium members. The Consortium was having financial difficulties. A fraud as alleged by Mercator was not to the knowledge of the bank, and there was nothing wrong by ONGC to invoke the bank guarantees. Grant of balance work to GPC was a commercial decision taken in the larger interest of the project. As our discussion shows that these conclusions are correct, it is further settled that the appellate court will not interfere with the exercise of discretion of the trial court and substitute its discretion unless the discretion is exercised arbitrarily, capriciously or perversely or where the court had ignored the settled principles of law regulating grant or refusal of interlocutory injunctions. If the trial court exercises the discretion in a reasonable and judicial manner, then merely because a different view is possible, the appellate court may not interfere. If the trial court exercises the discretion in a reasonable and judicial manner, then merely because a different view is possible, the appellate court may not interfere. As per the settled law governing the invocation of bank guarantee, the discretion used by the learned single Judge in refusing to grant an injunction, in this case, cannot be held to be arbitrary. 41. To conclude, no case is made out by Mercator for issuance of an injunction restraining invocation of bank guarantees. No perversity is committed by the learned single Judge in refusing to grant an injunction. 42. The Appeal is dismissed. 43. To state the obvious, the dispute between the parties will be decided on its own merits in the arbitration.